Record industry groups of the International Federation of the Phonographic Industries (IFPI) had called for an investigation into the online service, when it emerged that it was offering unauthorized MP3 tracks for sale.
Despite Moscow police recommending that the site be charged with copyright violations, news agency Tass has reported that Russian authorities declined to take action because Russian copyright laws do not cover digital media.
Meanwhile, AllofMP3.com said it has been granted legal rights from the Russian Multimedia and Internet Society to sell music in the form of licenses. However, record labels have argued that this group does not have the power to grant distribution rights to their music.
The decision comes as a further blow to the music industry, which is struggling to compete with music downloading devices such as Apple’s iTunes and Napster.
AllofMP3.com is still liable to receive civil lawsuits made by labels and record companies if they can provide evidence that the site has failed to meet its required payments to music licensees. An IFPI spokeswoman was reported as saying that the group will continue to pursue the case if the Moscow prosecutors take no further action.
